Finance
January 1, Social Security Increase Falls Short as Seniors Face Rising Costs
The recent update on the Social Security cost-of-living adjustment (COLA) signals that 2025 could be challenging for seniors. New projections indicate that retirees will see an increase of just 2.5%, equating to an average monthly boost of only $48, according to The Senior Citizens League (TSCL). “While 2.5% is lower than the 3.2% received in 2024, it wouldn’t be far from the historical norm. The COLA has averaged about 2.6% over the past 20 years. It went as low as 0.0% in 2010, 2011, and 2016 and as high as 8.7% in 2023,” TSCL reports.
Expenses continue to rise, making it increasingly difficult to survive on just Social Security. “Due to a higher cost of living, older Americans are using more and more of their income each month just to get by compared to a year ago,” TSCL highlights. In their 2024 Retirement Survey, 65% of seniors reported monthly expenses of at least $2,000, up from 55% in 2023, proving the economic strain is real and significant.
Retirees are understandably worried about their Social Security benefits’ long-term sustainability. Less than half believe they have enough to live comfortably through retirement, and nearly 90% are concerned that inflation will erode their savings’ value, according to the 2024 U.S. Retirement Survey by investment manager Schroders.
Seniors are struggling to cover basic necessities, let alone engage in discretionary spending. “A rise in monthly expenses wouldn’t be much of an issue if seniors’ higher expenses were going to fun activities, like spending time with their grandchildren or taking bucket-list vacations,” TSCL notes. “However, that’s not the case. Nearly 80% of senior households in the 2024 survey reported that their monthly budget for essential items like food, housing, and prescription drugs had increased over the last 12 months, with 63% saying they’re worried that their income won’t be enough to cover these basic costs in the coming months.”
The upcoming 2.5% rise is the lowest since 2021, sparking concerns among those who rely heavily on Social Security. “Ensuring that seniors have enough to feed and house themselves with dignity is a major reason why we advocate for a minimum COLA of 3%,” says Shannon Benton, TSCL’s Executive Director. Research shows that about two-thirds of seniors depend on Social Security for more than half of their monthly income, and 28% rely on it entirely.
Experts suggest smart financial planning to navigate the low COLA projections. Unfortunately, Social Security recipients have limited options beyond prudent budgeting and potentially part-time work. However, high-yield savings accounts and certificates of deposit (CDs) are worth considering, as today’s high interest rates could provide a little extra cash in the future.
As our loyal readers, we encourage you to share your thoughts and opinions on this issue. Let your voice be heard and join the discussion below.
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Cindy Merrill
September 30, 2024 at 8:37 am
We had a $5000 nest egg four years ago when Trump was President-it’s now gone and we’re just scraping by, after bills are paid we have just enough to take care of our two cats and to replenish household essentials: I can’t even recall the last time we went out to eat, will probably attend a Salvation Army Communal Thanksgiving dinner this year. This is why we’re voting for Trump- VP Harris does not deserve our vote.
Edith
September 30, 2024 at 9:11 am
I think our representatives need to focus on our needs and quite giving our money to others. I feel for these people but they are getting a free ride on the money that should support the people who furnish it. Most of us rely on ssi. When working with family it is difficult to save for the future. You look forward to retirement but the reality of it is not easy. Cost of living has spiked food, gas, medicine and essentials. History shows us that when prices go up they rarely come down. I worry about future generations that will inherit this burden. Politicians should quit insulting each other and focus on the issues and how to resolve them. Give back the good old USA land of the free and brave.
Dave Pearson
September 30, 2024 at 9:57 am
Congress needs to stop kicking the can down the road and do what they can to fix it. I’ve heard these words before, it won’t be the last time.
Donna
September 30, 2024 at 11:28 am
Unfortunately most of that is always taken away because they always raise Medicare as well
DORIS ANN BROWN
September 30, 2024 at 11:32 am
politicians care about their own income, but not Seniors. Donald Trump cares about the seniors. He needs to be elected quickly before K. finishes the account out giving to illegal aliens.
Steven
September 30, 2024 at 6:46 pm
Social Security Increase Falls Short as Seniors Face Rising Costs
The COLA is based on what the government claims to be the rate of inflation. The government is lying.
M.A. White
September 30, 2024 at 8:49 pm
My entire income is SS, not even close to what others make, at $1080/month. Started working at 16, will be 80 this month. What isn’t mentioned in the article is whatever increase we get, is immediately eaten up by a Medicare increase, which happens every year.
SIM
October 1, 2024 at 12:23 am
Everybody is complaining about the way things are in a Country where they are suppost to be the “Supreme Authority” in running the Country,
They have just sat on their ass and turned the Politicians loose to do anything they want where as if they would load their guns and take back Control of their Country, life would be easier,
But complaining is much easier to place the blame off on someone else than standing up and being counted.